NSW jail attack reveals broken system: ALP

A vicious attack allegedly waged by an Islamic State sympathiser inside a NSW prison is the latest symptom of a system in crisis, the state's Labor opposition claims.

Bourhan Hraichie, 18, has been charged over the attack on Thursday in which he allegedly carved the letters "e4e" into the forehead of a former Australian soldier with whom he was sharing a prison cell on the NSW mid-north coast.

The lettering is an apparent reference to the terror group's "eye for an eye, tooth for a tooth" mantra.

The radicalised teen is also accused of pouring boiling water over his 40-year-old cellmate's face, choking him and breaking his sternum.

NSW Corrections Minister David Elliott said he was unable to find any evidence the injured man was a former soldier, but said the alleged attack was "disgusting" regardless.

Mr Elliott conceded placing the alleged victim, who was a minimum-security prisoner, in a cell with the maximum-security teen was a mistake.

"That was a stuff-up," Mr Elliott told Alan Jones on 2GB Radio, adding that the prison's general manager has been stood down following the attack.

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Steve McMahon, from the prison officer's branch of the Public Service Association, has alleged vital information which could have prevented the attack was never acted on, despite being raised by frontline staff.

A full investigation into the management of radicalised prisoners is also set to be launched, with Mr Elliott saying Muslims are over-represented in the prison system.

Muslims comprise 3.2 per cent of the NSW population but 9.3 per cent of the state's prison population, according to the 2013 NSW Corrective Services census.

NSW Labor Leader Luke Foley said the attack was the latest saga in an "ever-lengthening story" of prison mismanagement.

He said a critical shortage of thousands of prison beds had pushed the system to crisis point.

"It's that extreme shortage that leads to these kinds of appalling management decisions to house extremist ISIS supporters with former Australian soldiers," Mr Foley told reporters in Sydney.

"I'm calling for a complete overhaul of prison management in the state, and I do think Mr Baird would be well served by finding a different minister to put in charge of our prisons."

Premier Mike Baird said any issues specific to Kempsey prison which may have triggered the incident would be investigated.

"Obviously mistakes have been made and we need to make sure they don't happen, not only there (at Kempsey), but across the system," he said.

The injured man is expected to be released from hospital and returned to prison in coming days, while the 18-year-old has been relocated and is due to face Kempsey Local Court on May 23.

NSW Corrections Minister David Elliott has reportedly investigated the injured man's claims that he served in East Timor.

Mr Elliott told the ABC the man claimed in an interview with Corrective Services on Monday that he served eight years in the Army Reserve but had not served in the Australian Regular Army or overseas military operations in East Timor.

"Furthermore, the man lost sight in his left eye during a childhood accident which would have made any military service unlikely," he told ABC.

But he said the man's background did not change the seriousness of the incident.